I 

116TH CONGRESS 

1ST SESSION H. R. 2879 

To amend the Internal Revenue Code of 1986 to provide further tax incentives 

for dependent care assistance. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2019 

Ms. SA ́NCHEZ (for herself and Mr. KELLY of Pennsylvania) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

further tax incentives for dependent care assistance. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Working Families Re5 lief Act’’. 

6 SEC. 2. EXPANSION OF EXCLUSION FOR DEPENDENT CARE 

7 ASSISTANCE PROGRAMS. 

8 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter9 nal Revenue Code of 1986 is amended by striking ‘‘shall 

10 not exceed $5,000 ($2,500 in the case of a separate return 


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1 by a married individual).’’ and inserting ‘‘shall not ex2 ceed— 

3 ‘‘(i) except as provided in clause (ii), 

4 $10,500, and 

5 ‘‘(ii) in the case of a separate return 

by a married individual, 1 6 ⁄2 the amount in 

7 effect for the taxable year under clause 

8 (i).’’. 

9 (b) INFLATION ADJUSTMENT.—Section 129(a)(2) of 

10 such Code is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(D) ADJUSTMENT FOR INFLATION.—In 

13 the case of taxable years beginning after De14 cember 31, 2020, the $10,500 amount under 

15 subparagraph (A)(i) shall be increased by an 

16 amount equal to— 

17 ‘‘(i) such dollar amount, multiplied by 

18 ‘‘(ii) the cost-of-living adjustment de19 termined under section 1(f)(3) for the cal20 endar year in which the taxable year be21 gins, determined by substituting ‘calendar 

22 year 2019’ for ‘calendar year 2016’ in sub23 paragraph (A)(ii) thereof. 

24 If any amount as adjusted under the preceding 

25 sentence is not a multiple of $100, such amount 


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1 shall be rounded to the next lowest multiple of 

2 $100.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to amounts paid or incurred in tax5 able years beginning after December 31, 2019. 

6 SEC. 3. ALLOWANCE OF CREDIT FOR SMALL EMPLOYER DE7 PENDENT CARE ASSISTANCE PROGRAM 

8 START-UP COSTS. 

9 (a) IN GENERAL.—Section 45E of the Internal Rev10 enue Code of 1986 is amended— 

11 (1) by striking ‘‘pension plan’’ in subsection (a) 

12 and inserting ‘‘employee benefit’’, and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(f) APPLICATION TO DEPENDENT CARE ASSIST16 ANCE PROGRAMS.— 

17 ‘‘(1) IN GENERAL.—A dependent care assist18 ance program of an eligible employer which meets 

19 the requirements of section 129(d) shall be treated 

20 as an eligible employer plan for purposes of this sec21 tion. 

22 ‘‘(2) SEPARATE APPLICATION.—This section 

23 (including the limitation under subsection (b)) shall 

24 be applied separately with respect to any such de25 pendent care assistance program of the eligible emVerDate Sep 11 2014 03:04 Jun 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2879.IH H2879

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1 ployer and other eligible employer plans of such eli2 gible employer.’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 38(b)(14) of the Internal Revenue 

5 Code of 1986 is amended by striking ‘‘pension plan’’ 

6 and inserting ‘‘employee benefit’’. 

7 (2) The heading for section 45E of such Code 

8 is amended by striking ‘‘PENSION PLAN’’ and in9 serting ‘‘EMPLOYEE BENEFIT’’. 

10 (3) The table of sections for subpart D of part 

11 IV of subchapter A of chapter 1 of such Code is 

12 amended by striking ‘‘pension plan’’ in the item re13 lating to section 45E and inserting ‘‘employee ben14 efit’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to costs paid or incurred in taxable 

17 years beginning after December 31, 2019, with respect to 

18 dependent care assistance programs first effective after 

19 such date. 

20 SEC. 4. CREDIT FOR MATCHING DEPENDENT CARE ASSIST21 ANCE PROGRAM CONTRIBUTIONS BY EM22 PLOYERS. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 45S the fol2 lowing new section: 

3 ‘‘SEC. 45T. CREDIT FOR EMPLOYER DEPENDENT CARE AS4 SISTANCE PROGRAM MATCHING CONTRIBU5 TIONS. 

6 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

7 employer dependent care assistance matching contribution 

8 credit determined under this section for any taxable year 

9 is an amount equal to the lesser of— 

10 ‘‘(1) the amount of contributions made by the 

11 employer with respect to employees to a dependent 

12 care assistance program that meets the requirements 

13 of section 129(d), or 

14 ‘‘(2) the amount of contributions to such de15 pendent care assistance program elected by such em16 ployees under a cafeteria plan of the employer to 

17 which section 125 applies. 

18 ‘‘(b) LIMITATION.—The credit allowed under sub19 section (a) for any taxable year with respect to any em20 ployee shall not exceed $1,000. 

21 ‘‘(c) DEFINITIONS.—Any term used in this section 

22 which is used in section 129 shall have the meaning given 

23 such term under section 129.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 38(b) of the Internal Revenue Code 

2 of 1986 is amended by striking ‘‘plus’’ at the end of 

3 paragraph (31), by striking the period at the end of 

4 paragraph (32) and inserting ‘‘, plus’’, and by add5 ing at the end the following new paragraph: 

6 ‘‘(33) the employer dependent care assistance 

7 matching contribution credit determined under sec8 tion 45T(a).’’. 

9 (2) The table of sections for subpart D of part 

10 IV of subchapter A of chapter 1 of the Internal Rev11 enue Code of 1986 is amended by inserting after the 

12 item relating to section 45S the following new item: 

‘‘Sec. 45T. Credit for employer dependent care assistance program matching 

contributions.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2019. 

Æ 


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